Using EMI Estimates to Avoid Overborrowing on Personal Loans

When you borrow money, you usually have to pay a little bit back every month - that is called an EMI.

Before you borrow, it is smart to check if you can really afford those monthly payments.

You should only use the money you actually take home, not extra money like bonuses you might not always get.

Keep your monthly loan and credit-card payments to no more than about 30 to 40 percent of your pay.

That way, you still have money left for savings and surprises.

If a loan would be too expensive each month, it is better to pay it back over a longer time instead of borrowing more.

But remember, paying over a longer time means you pay more interest in total.

Before agreeing to a quick loan, check the interest rate and make sure the payments fit your budget.

Getting a family member with a steady income to sign with you can sometimes make the loan cheaper.

Always plan ahead so a loan does not become a stressful burden.